If there is one sector that has emerged as the most important to decarbonise as part of NSW – and Australia’s – pitch to compete on the global stage it’s sustainable finance, and finance for sustainability.
NSW Climate Change, Energy and Environment Minister Penny Sharpe on Wednesday launched an update on a study that three years ago started the policy work to seize the potential of a decarbonised economy.
NSW Decarbonisation Innovation 2023 is the follow up the former state government’s initiative for the study in 2020.
It looks at progress and identifies new and emerging opportunities for reducing greenhouse gas emissions, growing the economy, and creating jobs.
NSW chief scientist and engineer Hugh Durrant-Whyte, speaking at the launch before nearly 100 people at the Tyree Energy Technologies Building, at the University of New South Wales said the report was part of the state government’s commitment to address climate change and reduce its emission footprint.
“NSW already possesses several competitive advantages in decarbonisation innovation, including a strong foundation in climate technology research, development and commercialisation,” he said.
“The challenge now is to ensure we meet our environmental responsibilities while maximising the economic potential to become a global leader in these technologies.”
The results were informed through new analytical data and consultation with over 100 industry, research, and government stakeholders to educate policymakers, investors, researchers, and industry stakeholders on advancing decarbonisation and innovation and meeting net zero targets.
“We asked the industry to tell us what technology was required in its quest to decarbonise and the research sector how it could accelerate the development of this technology. Clearly, government has a key role in ensuring that this collaboration is efficiently and effectively supported,” Durrant-Whyte said.
“This study shows there are opportunities for decarbonisation technologies to have significant environmental impact across sectors including energy, transport, the built environment, industry, and land and agriculture.”
But how far have we come?
The 2020 study recommended the establishment of a hub to manage, advise and advocate for decarbonisation, leading to the creation of the NSW Decarbonisation Innovation Hub.
Professor Deo Prasad, the chief executive, said the Hub’s fast establishment was evidence of the state’s commitment to decarbonisation.
“We look forward to working with both the Office of the NSW Chief Scientist and Engineer and the Office of Energy and Climate Change to ensure the realisation of the many opportunities presented in the 2023 Study,” Prasad said.
Roger Swinbourne, who is a member of the expert panel that informed both reports, told The Fifth Estate that the first report identified the need for an innovation ecosystem in the state that could facilitate a decarbonisation pathway for government and industry in NSW.
The second report provides sector by sector profiles to give government and industry the opportunity to track and prioritise their business plans, investments and innovations with greater confidence, he said. Especially given the speed of change in the second in the past two years.
The evolution of sustainable finance will be critical to progress, as was the “financing of sustainability”. That is, finding ways to fund the programs, projects and innovations we need that might otherwise be disincentivised, plus the regular challenges of financial imperatives.
Global finance markets are in many cases operating ahead of Australia in sustainable finance, Swinbourne said.
This meant that businesses or innovators in carbon may seek global finance and that the local investment market will miss out – and carry future risk.
“There is an opportunity to bring together our research and innovation and a sustainable finance industry to facilitate the change,” he said.
The federal government last week released its sustainable finance strategy to reduce barriers to investment into sustainable activities. Priority areas to focus on are: better transparency on climate and sustainability; financial system capabilities; and government leadership and engagement.
Feedback on the strategy closes on 1 December.
“Decarbonisation will put NSW on the world stage”
According to the report, NSW had the potential to become a global leader in innovative technology and services that enable decarbonisation and improved energy affordability and capacity.
A summary of the opportunities based on observations and findings include:
- foundational elements opportunities: a chance to advance sectors through the development of technology, development, market incentives, regulatory frameworks, and public-private partnerships
- sector interaction opportunities: encouraging cross-sector communication in understanding and reducing greenhouse gas emissions and adopting new technologies and services which cannot be achieved in one sector alone
- sector cluster opportunities: providing a focus for the stakeholders in the 13 sector clusters and 29 specific sectors to act upon in resource allocation, market growth and policy alignment
- decarbonisation innovation readiness level improvement (DIRL) opportunities: the DIRL can be improved upon to help industry readiness in decarbonisation innovation and transition to a low-carbon economy
There’s more to be done
The Office of the Chief Scientist and Engineer will follow up with a review of the report and the state’s progress. The scope of review will include:
- technologies and services needed to reduce carbon
- net value of technology and services
- barriers to the development of technology
- and the role of the NSW government in
- addressing the barriers
- supporting the acceleration of development
- ensuring that NSW takes advantage of carbon reduction technologies
Other members of the expert panel comprise Professor Hugh Durrant-Whyte (Chair); Professor Michael Dureau; Professor Frank Jotzo; Meg McDonald